Article

2025 Tennessee reassessment: Commercial real estate in major markets at risk of large property tax increases

Oct. 8, 2024 · Authored by Ryan Cundiff

Tax year 2025 is set to have a major impact for real estate property tax valuation in Tennessee. Three of the four largest counties, Davidson, Hamilton, and Shelby are set to undergo their state-mandated reassessment for the first time since 2021.

The 2021 reassessment saw huge increases across the board for most properties, but certain property types, like hotels and retail, saw only minimal increases due to market data that was highly impacted by the COVID-19 Pandemic. This ultimately resulted in a decrease in their overall tax burden as Tennessee is a revenue neutral state that decreases tax rates in reassessment years. For the 2025 reassessment, jurisdictions are going to rely on market data up to Dec. 31, 2024, which has seen the return of historical hotel occupancy/average daily rates (ADR). With continued retail strength in certain submarkets and the Fed lowering interest rates, we expect drastic increases for all property types in these counties this go around. Owners and investors in office buildings may see relief in certain submarkets, as those remain the only property subtype that has struggled to revive in a post-pandemic marketplace.

We highly recommend Tennessee commercial real estate owners and investors partner with an experienced property tax team ahead of the reassessment notices being released in Spring 2025. With some appeal windows being as small as 30 days after mailing of value notices, a trusted partner advocating on your behalf is imperative in navigating the deadlines and tax laws associated with the upcoming reassessment. Please see below for a summary of anticipated increases as well as a timeline for when notices/appeal deadlines are set to take place:

2025 Tennessee property reassessment dates and deadlines

2025 Tennessee reassessment notice mailing dates and deadlines subject to change. Please refer back to this table as we approach reassessment season for the most up-to-date information.

Baker Tilly's best-in-class team of Tennessee property tax professionals will be updating commercial real estate owners and investors as news pertaining to the reassessment continues to roll out. It is not too early to reach out to a property tax professional to begin navigating this reassessment process. Contact us today to ensure your approach to reassessment appeals is optimized, resulting in maximum value reductions and ensuring that you only pay what is fair and equitable on your Tennessee portfolio. Learn more about our client-centric approach to commercial real estate property tax.

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.